While the upfront discount of 4. Do these make the ETF an attractive investment? As on 4 December , the fund generated 3. Given the portfolio construction, the theme for this fund could be best described as a combination of PSE and energy sectors.
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While the upfront discount of 4. Do these make the ETF an attractive investment? As on 4 December , the fund generated 3. Given the portfolio construction, the theme for this fund could be best described as a combination of PSE and energy sectors. The government-owned companies are not wealth creators. It performed marginally better in with returns of The comparison with funds in the energy theme is also not favourable for the CPSE ETF with the sector significantly out-performing with 0.
The Nifty 50 TRI outperformed in , and with returns of Also, its Sharpe ratio is lower at Prospects Many of the stocks in the portfolio have seen erosion in prices which has led to better valuations in the form of lower P-E price-to-earnings and high dividend yield ratios. The regular payment of dividend is one of the criteria for including stocks in the CPSE index. This along with the low market price of the stocks contributes to the higher dividend yield of this index relative to Nifty 50 and other broader market indices.
PSU stocks have been reduced to a dividend play. While there seems little downside from these levels, only select stocks will provide steady returns," says Amnish Agarwal, head-research, Prabhudas Lilladhar Pvt.
While there seems to be limited downside for oil marketing companies, crude prices and government policy are major determinants as we are close to Lok Sabha elections. The energy sector, to which the fund has significant exposure, is sensitive to GDP growth.
The below-expectation year-on-year y-o-y GDP growth at 7. Stable crude prices and consistent pricing policy for petrol and diesel can provide medium term gains," said Aggarwal. Mint money Take The fund deals a double whammy of concentration of sector and ownership and this can be seen in its performance. Since government ownership is indispensable in the selection of the components of the index, it excludes sectors that represent the India growth story.
If the ownership structure resonates with you, then there are more efficient ways to take exposure to them. Another option is to look at diversified large- and multi-cap funds which take exposure to well managed companies, including PSEs, across sectors. According to Kothari, the timing of entry and exit is important. Share Via Topics.
Should you invest in CPSE ETF?
The issue will open for retail investors the next day. It runs a concentrated portfolio with a handful of stocks having weights as high as 20 per cent on the underlying index. The portfolio is concentrated towards the energy and oil sector. The units of ETF can be traded like a stock on exchanges. When will it open?
CPSE ETF’s 6th FFO opens soon. Should you invest?